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Fiat Chrysler Automobiles has confirmed a request for an Italian state-backed loan to help the automotive sector relaunch from the coronavirus shutdown, a move that set off debate in Italy over whether such money should be made available to companies with legal headquarters overseas.

FCA said in a statement late Saturday that it was seeking 6.3 billion euros (USD 6.8 billion) in financing through Intesa SanPaolo, or one-quarter of its industrial revenue in Italy.

The money would be dedicated exclusively to financing FCA's activities in Italy and intended to provide further support to some 10,000 small and medium enterprises in the automotive supply chain, the statement said.

It noted that the automotive sector generates 6.2 per cent of Italy's gross domestic product and represents 7 per cent of all manufacturing jobs.

Some politicians in the governing coalition questioned the loan to the carmaker, which moved its legal headquarters to the Netherlands and fiscal headquarters to Britain in 2014 after completing the merger between Italy's Fiat and U.S. carmaker Chrysler.

But Premier Giuseppe Conte told reporters Saturday night that the better question is why big companies find it more attractive to move their legal or fiscal headquarters abroad.

Conte said that the issue would be addressed in an upcoming decree aimed at simplifying bureaucracy.

"We don't need pose the problem who goes and why to Britain, the Netherlands or other countries. We simply need to make our country more attractive. We need to ask ourselves why they go abroad,'' he said, underscoring that FCA is a major Italian employer.

The shutdown of Fiat Chrysler production and showrooms in Italy because of coronavirus had a dramatic short- and medium-term impact on the entire automotive ecosystem, Fiat Chrysler said in a statement.

Fiat Chrysler began reopening Italian plants at the end of April. The automaker employs 55,000 people at its 16 Italian plants and 26 research and development sites, making it Italy's largest industrial group.

It is also the largest purchaser of auto parts in the country, accounting for 40 per cent of around 50 billion euros in revenue generated by 5,500 suppliers.

Fiat Chrysler is in the process of a merger with French carmaker PSA Peugeot.

Both carmakers have scrapped dividend payments promised to their shareholders as part of the merger deal because of the COVID-19 crisis, but they say the deal remains on track to close by the end of the first quarter of 2021.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)